Westpac Banking Corp. experienced a share price drop of up to 6% following a decline in profit and margins. Chief Executive Officer Anthony Miller highlighted that the high cost of living in Australia is significantly impacting customers’ spending power. The bank reported an unaudited net profit of A$1.7 billion ($1.1 billion) for the three months ending December 31. The decrease was primarily attributed to hedging, while margins and profit remained relatively stable. The core net interest margin fell to 1.81%. Miller, who recently took over as CEO, is navigating Westpac through a period of anticipated monetary policy easing in Australia, which could further affect bank margins. Analysts are cautious about the future outlook after a substantial rise in the stock price over the past year. Miller noted, “Cost of living pressures and high interest rates continue to pose challenges for some customers, while many businesses are facing cost pressures and reduced demand.” He added that inflation has shown signs of easing, and the Reserve Bank of Australia may lower the cash rate soon. As of 10:45 a.m. in Sydney, Westpac’s stock had fallen 5.9%, reducing its annual gain to approximately 30%. According to Bloomberg Intelligence, Westpac’s profit could decline by 3-5% in fiscal 2025, following a 9% drop in the first quarter to A$1.7 billion. The margin decreased by 2 basis points compared to the second half of 2024, signaling potential challenges for the sector amid expected rate cuts.
Westpac’s stock declines due to a decrease in profit and concerns about margins.
